A Summary of H.278
The Vermont Downtown Community Development Act
(Act 120 of the 1997 adjourned session)
(This bill can also be viewed at www.leg.state.vt.us)
To view the highlights of this bill click here
Section 1. Historic Downtown Development (24 V.S.A. Chapter 76A)
2790 Legislative Policy and Purpose
2791 Key Definitions
1. "Community reinvestment agreement" means an agreement among municipal government officials, business leaders and community groups.
2. "Downtown" means the traditional central business district of a community that has served as the center for socioeconomic interaction in the community, characterized by a cohesive core of commercial and mixed use buildings, often interspersed with civic, religious, and residential buildings and public spaces, typically arranged along a main street and intersecting side streets and served by public infrastructure.
3. "Downtown development district" or "downtown district" means a district delineated by the municipality and designated by the downtown development board under section 2793 of this title.
2792 Vermont Downtown Development Board
(a) A "Vermont downtown development board", also referred to as the "state board", is created to administer the provisions of this chapter. The state board members shall be the following or their designees:
(1) the secretary of commerce and community development;
(2) the secretary of transportation;
(3) the secretary of natural resources;
(4) the secretary of human services;
(5) the commissioner of labor and industry;
(6) the commissioner of housing and community affairs;
(7) three public members representative of local government, one of whom shall be designated by the Vermont League of Cities and Towns, and two shall be appointed by the governor; and
(8) 2 regional non-voting members from each region, designated by the regional planning commission and development corporation respectively, to serve during consideration by the board of applications from their respective regions.
(b) The board shall elect its chair from among its membership.
(c) The department of housing and community affairs shall provide staff and administrative support to the board.
2793 Designation of Downtown Development District
(a) This section describes how a municipality by its legislative body may apply to the state board for designation of a downtown area within that municipality as a downtown development district. The application shall contain a map delineating the district, show evidence that the regional planning commission and regional development corporation have been notified of the municipality's intent to apply and information showing that the district meets the standards for designation established in subsection (b) of this section.
(b) It further directs the board to approve designation within 45 days of receipt of a completed application if it finds with respect to that district, that the municipality has:
(1) demonstrated a planning commitment through the adoption of a design control district, an historic district pursuant to 24 V.S.A. section 4407(15), an urban renewal district, or through the creation of a development review board authorized to undertake local Act 250 reviews pursuant to section 4449 of this title; and
(2) provided evidence of an executed community reinvestment agreement, executed by representatives of the wide variety of downtown interests, and that contains the following provisions:
(A) a delineation of the area that meets the requirements set forth in subdivision 2791(3) of this title and that is part of or contains a district that is listed or eligible for listing on the National Register of Historic Places;
(B) a capital improvement plan to improve or preserve public infrastructure within the district, including facilities for public transit, parking, pedestrian amenities, lighting and public space;
(C) a source of funding and resources necessary to fulfill the community reinvestment agreement, demonstrated by at least one of the following: a special assessment district; authority to enter into tax stabilization agreements; a commitment to implement a tax incremental financing district; or other multiple year financial commitments among parties subject to approval by the state board;
(D) an organizational structure necessary to sustain a comprehensive and long-term downtown revitalization effort, evidenced by a local non-profit or a municipal board whose primary purpose is the revitalization of the district;
(E) evidence that any municipal sewage system and public water supply serving the proposed downtown district is in compliance with state requirements, and that the municipality has dedicated a portion of any unallocated reserve capacity of sewage and public water supply for growth within the proposed downtown district. Any municipality that does not have a municipal sewage system and public water supply serving the proposed downtown district shall provide evidence to the board of a commitment to construct such a system and supply within no more than ten years. If a municipality fails to construct a municipal system, the state board will revoke the designation unless the municipality demonstrates to the state board that all good faith efforts were made.
(c) The downtown board will review a community's designation every 3 years, and if it finds that the district no longer meets the standards for designation it may: require corrective action; provide for technical assistance; or remove designation, with such removal of designation not affecting any previously awarded benefits.
2794 Incentives for Program Designees
(1) priority consideration by any agency of the state administering any state or federal assistance program providing funding or other aid to a municipal downtown area, with consideration given to such factors as the costs and benefits provided and the immediacy of those benefits;
(2) a state tax credit of five percent for substantial rehabilitation of certified historic structures in conjunction with the federal Rehabilitation Investment Tax Credit. This tax credit may be awarded prior to downtown designation if the board finds that the municipality intends to seek designation and has made substantial progress in doing so;
(3) a state tax credit of 25 percent for qualified expenditures on older and historic buildings. This tax credit may be awarded prior to downtown designation if the board finds that the municipality intends to seek designation and has made substantial progress in doing so;
(4) a planning grant, in an amount not to exceed $8,000.00 per site, for an initial site assessment of a suspected contaminated site that otherwise qualifies under the community development block grant program;
(5) eligibility for financing of transportation projects under the state infrastructure bank;
(6) eligibility for current owners and prospective purchasers who otherwise qualify under the redevelopment of contaminated sites program under subsection 6615a(f) of Title 10, or in the case of current owners, who are innocent owners;
(7) technical assistance by the department of housing and community affairs for planning and coordination issues, adaptive reuse of buildings; marketing plans; development of programs to encourage rehabilitation of building facades; and in coordination with the agency of transportation, planning for multimodal transportation;
(8) hospitality training to be arranged by the department of tourism and marketing;
(9) promotion of the downtown development district by the department of tourism and marketing as part of the department's integrated marketing and promotion program;
(10) consistent with the department's available resources and subject to the department's priority for ensuring public safety, technical support from the department of labor and industry for the rehabilitation of older and historic buildings;
(11) a rebate of the cost of a sprinkler system not to exceed $2,000 to a building owner who installs a complete automatic fire sprinkler system and has been certified for one of the state tax credits;
(12) eligibility to participate in the downtown transportation and related capital improvement fund program.
2795 Considerations for Competitive Based Incentives
When awarding competitive-based incentives, the board will give consideration to the following:
(1) vacancy rate for existing buildings;
(2) current or projected unemployment rate;
(3) ordinances or bylaws adopted by the municipality that support the preservation of the downtown;
(4) integration of the proposed improvements with any coordinated plan for the downtown district and surrounding area;
(5) the degree of deficiency of transportation infrastructure in the district;
(6) vulnerability of the district to decline due to competing development in adjacent areas;
(7) the immediacy of the benefits provided and the desirability of prompt action to secure those benefits for a district.
2796 Downtown Transportation and Related Capital Improvement Fund
The fund is administered by the downtown board to aid designated downtown districts through loans, loan guarantees or grants for capital transportation and related improvement projects to support economic development. If an award is made as a grant, it may not exceed 25% of a project cost, and may not exceed $250,000 annually for any municipality. $400,000 is appropriated to this fund for FY 1999.
Section 1a. State Infrastructure Bank (10 V.S.A. 280e(a))
Adds a specific focus on downtowns for this transportation related funding source.
Section 1b. Reallocation of Sales Tax on Construction Materials (32 V.S.A. 9819)
(a) Receipts from sales tax on construction materials used in a qualified project in a designated downtown may be paid back to the municipality in which the project is located in the following amounts:
(1) where population is under 7,500 all receipts in excess of $100,000 for each separate qualified project, provided that no more than $600,000 be allocated to all municipalities of this population;
(2) where population is greater than 7,500 but less than 30,000, all receipts in excess of $200,000 for each separate qualified project, provided that no more than $600,000 be allocated to all municipalities of this population;
(3) where population is greater than 30,000, all receipts in excess of $1,000,000 for each separate qualified project, provided that no more than $800,000 be allocated to all municipalities of this size.
(b) Definitions
(1) "construction materials" means all materials purchased to be incorporated into a qualified project.
(2) "qualified project" means expansion, rehabilitation or new construction in a designated downtown, provided that the project does not seek either of the state tax credits for historic or older buildings, and in the case of new construction that the building be compatible with existing buildings that contribute to the integrity of the district.
(c) Requests for allocation of revenues shall be made by the treasurer of the municipality to the downtown board, which shall certify the qualified projects and sales taxes paid to the commissioner of taxes. Revenues allocated to a municipality shall be used only for expenditures related to the support of the qualified project which generated the revenues.
Section 2. Implementation Resources
A municipality may apply for a matching planning grant of up to $40,000 from the CDBG program, if the community is otherwise eligible.
Section 3. Tax Credit for Substantial Rehabilitation of Historic buildings also Claiming Federal Rehabilitation Tax Credit. (32 V.S.A. 5930n)
This section allows an additional state tax credit of 5% along with the Rehabilitation Investment Tax Credit when expenditures exceed $5,000.00 or the adjusted basis of a certified historic building and its structural components, whichever is greater. There is a recapture provision in this section of between 100% the first year down to 20%, in the fifth year for failure by the developer to comply with the requirements. In any calendar year beginning in 1999, the state board can not award more than $300,000 in tax credits under this section and section 4 below.
Section 4. Rehabilitation Tax Credit for Older or Historic Buildings (32 V.S.A. 5930p)
This section allows for a 25% state tax credit on rehabilitation costs if the project can show that it will bring the building into compliance with ADA, building and life safety codes, it will abate or make safe lead paint conditions, it will abate any other substances hazardous to human health and safety, it will involve participation in the redevelopment of a contaminated site, it will rehabilitate a building facade that contributes to the integrity of the downtown development district, or would create additional areas able to be occupied within the existing building that at the same time addresses one of the first four items. A project that is eligible for the federal RITC can not access this credit. There is a recapture provision for non- performance. The tax credit allocation may be requested in the form of a mortgage credit certificate which may be accepted by a bank in return for more favorable conditions on the applicant's mortgage. In any calendar year beginning in 1999, the state board can not award more than $300,000 in tax credits under this section and section 5930n.
Section 5. Tax Credit for Training Employees (32 V.S.A. 5930t)
This section allows an employer to claim up to $400 in tax credits per year for training qualified employees if the employer does business in a downtown area with the intent of providing permanent employment. The employer must pay annualized wages of at least $14,000.00 plus benefits. The employee must be qualified as economically disadvantaged.
Section 6. Broadens eligibility for who may receive brown field assistance. (10 V.S.A. 6615a(f))
Section 7. Allows a designated downtown to post speed limits of less than 25 MPH. (23 V.S.A. 1007(g))
Section 8. Allows a designated downtown to have information and guidance signs that would not otherwise be allowed, upon approval by the state's Travel Information Council. (10 V.S.A. 494(17))
Section 8a. Access Management (19 V.S.A. 1111)
Broadens the criteria to be used in granting access to public highways so that reasonable levels of service and protection of public investment will be considered as well as public safety. It also prohibits the recording of deeds that subdivide land unless all of the abutting lots created are in accord with the standards of this section.
Section 9. Clarifies another section in Agency of Transportation statute that would allow the signs in Sect. 8 above. (10 V.S.A. 495(d))
Sections 9b-I. Overweight and overlength trucks (10 V.S.A. Chapter 13)
These sections require the commissioner of motor vehicles to adopt rules that will govern the issuance of permits that allow overlength and overweight trucks to use highways; revise the penalties to be assessed for violations; provide for suspension of a permit for repeat violators; require the commissioner to prepare a list of all highways approved for use by trailers over 53 feet in length; and direct AOT to study the feasibility of erecting signs on highways where trailers over 53 feet are prohibited. A regional enforcement fund of $25,000 is created to support a truck enforcement initiative in Windsor county.
Section 10. Appropriations
(a) $60,000 appropriation and a staff position to DHCA.
(b) $25,000 to the commercial vehicle enforcement fund in Section 9 above.
(c) $400,000 from the Transportation Fund to the Downtown Transportation and Related Capital Improvement Fund. The bill states that it is the intention of the General Assembly to provide funding in at least this amount on an annual basis.
Section 11. Effective Dates
Most of the bill takes effect on July 1, 1998, with the following exceptions:
(1) Sections 4 and 5 (tax credits for rehabilitation of historic buildings and Rehabilitation Tax Credit) shall take effect January 1, 1999.
(2) Section 9b (penalties for overweight and overweight trucks) shall take effect August 1, 1998.
This bill can be viewed at www.leg.state.vt.us DHCA/JB 5/12/98